AmTrust investors have asked a New York federal judge to certify three subclasses covering those who purchased stock in the insurer's $320 million initial public offering, after the Second Circuit revived their case against the firm and its auditor BDO USA LLP over financial restatements AmTrust had to make.

The investors filed a motion on Thursday seeking certification of the November 2015 common stock subclass, the September 2016 Series F Preferred stock subclass, and the BDO subclass.

According to the motion, the November 2015 common stock subclass includes all purchasers of AmTrust common stock issued in or traceable to the company's IPO; the September 2016 Series F Preferred stock subclass includes purchasers of AmTrust's 6.95% noncumulative preferred stock, Series F, that was issued in or traceable to the company's 2016 IPO; and the BDO subclass includes those who purchased AmTrust common or Series F stock between March 3, 2014, and April 10, 2017.

The motion states the first two subclasses are asserting claims related to alleged financial misrepresentations that were made in connection with AmTrust's IPOs, and the BDO subclass is asserting securities fraud claims against BDO.

The suit accuses AmTrust of making a series of misstatements about its finances dating back to 2012 that required the insurer to restate its financials and ultimately sank the company's stock. BDO served as AmTrust's auditor during the relevant period.

Thursday's motion further asks that the court appoint Robbins Geller Rudman & Dowd LLP as class counsel, and Jupiter Capital as lead plaintiff for the November 2015 subclass. The motion also asks that the September 2016 subclass be led by the Living Trust, and that the BDO subclass be led by the Living Trust and the North Atlantic Funds.

In arguing for certification, the investors argue the subclasses meet all the necessary requirements, including numerosity, commonality and predominance.

Thursday's motion for class certification comes a little less than a year after the Second Circuit reversed course in the case and found BDO was not off the hook for certifying AmTrust's financial statements. The appeals court vacated a district court's dismissal of securities fraud claims against BDO, which the Second Circuit itself had affirmed in August 2023.

While the district court had found potential misstatements made in BDO's audit opinion of AmTrust's financials were immaterial, the Second Circuit said last October they "subjected unknowing investors to the risk that AmTrust's financial statements were unreliable."

BDO, in opposing a bid for a rehearing, argued the panel made the correct decision back in 2023 and pushed back against the U.S. Securities and Exchange Commission's "misdirected concern" that no auditor opinion can ever be found material to investors, which the auditor argued is not what the court said in this case.

Despite not being a party to the private litigation, the SEC filed an amicus curiae brief at the behest of the Second Circuit, which urged the agency to weigh in after three former SEC chief accountants and deputy chief accountants filed a brief backing AmTrust investors' calls to revive the claims against BDO.

The agency urged the court to reconsider its materiality analysis on the BDO certification, arguing investors rely on such statements to make investment decisions and that the statements are not immaterial simply because the language is standardized.

In 2018, the SEC temporarily barred three former BDO accountants from auditing publicly traded companies, following the release of an AmTrust audit report before the underlying auditing work was completed. BDO is currently petitioning for the U.S. Supreme Court's intervention in the case.

Representatives for the parties did not immediately respond to requests for comment on Friday.

The investors are represented by Samuel H. Rudman, David A. Rosenfeld, Mark T. Millkey, Robert D. Gerson, Natalie C. Aranella and Joshua D. Forgy of Robbins Geller Rudman & Dowd LLP, Jeremy A. Lieberman of Pomerantz LLP, and Peretz Bronstein of Bronstein Gewirtz & Grossman LLC.

AmTrust Financial is represented by Steven M. Farina, Amanda M. MacDonald, Lydia A. Weiant and George A. Borden of Williams & Connolly LLP.

BDO is represented by Timothy E. Hoeffner and Jason D. Gerstein of McDermott Will & Schulte.

The case is In re AmTrust Financial Services Inc. Securities Litigation, case number 1:17-cv-01545, in the U.S. District Court for the Southern District of New York.